BY

Gagan

Two major focusing areas DEMAND FORECASTING the activity of estimating the quantity of a product or service that

consumers will purchase. FMCGPackaged consumable goods People buy at regular interval Ex., Toiletries Soaps and detergents Cosmetics Pharmaceuticals Further, the packaged food products and drinks are also sold

under the FMCG, since these mobile phones, MP3 players, external hard drives.

Importance of Demand Forecasting at SKU levelefficient operations & high levels of customer service

UnderestimationPoor serviceAdditional ordering expensesOverestimationDead stockLosses of investments

FMCGIndian FMCG Sector is expected to reach USD 33.4 billion by the year 2015.Development by the Indian government.Increase in the disposable income.Uncertainty in demand

FORECASTING TECHNIQUES

FORECASTING ERROR

The Need of Modelling of Adjustments61.2 % of users make regular managerial adjustments to

software generated forecasts Experts examine the model-based forecast st,i

and can adjust it in the light of their domain knowledge.The final forecast becomesft,i=st,i + at,iwhere at,i - size of adjustment,

Judgmentally adjusted forecasts areHighly subjectiveBiased and inefficientStatistical modelling of adjustments is needed toImprove the quality of the final forecastsby optimally handling the available informationObtain objective interval forecasts

The Proposed DevelopmentsThe study aim:

Development of a demand forecasting model for products following non-homogeneous demand patternDevelopment of a comprehensive framework for demand forecasting of FMCG products.

The proposed developments are based on Bayesian approach,which allows touse more flexible and robust modesobtain exact interval forecastsfind optimal estimations according to a specified loss function

Research MethodologyApplication of Quantitative techniques for

development of forecasting model.

THANK YOU…..